An investor should properly document settlement terms in case they have reached a settlement with a developer and not just walk away from their investment to avoid future liabilities, says a legal expert.
“If an agreement is reached then it should be carefully and timely memorialised in an agreement, which would become an amendment to the governing sales and purchase agreement,” Ludmila Yamalova, Managing Partner, HPL Yamalova & Plewka JLT said.
She was responding to a query from an investor who wants to consolidate his two units into one and claims that the project has been put on hold.
According to Yamalova, a developer may not accept consolidation if the project in an advance stage since he may have to add new inventory to his already existing unsold stock. In such cases, the developer may agree to reduce the price reflecting the market conditions. Besides, consolidation is difficult if the units are in different projects since cancellation of a contact may imply that the project may not go ahead.
“But to cancel the whole project requires consent from many investors, which is extremely difficult to obtain, in addition to Rera approval.
This may be one of the reasons as to why developers are so reluctant to consolidate investments,” she added.
As property prices in the UAE dropped following the global economic slowdown, a number of investors left the country without informing their banks or developers. In the past one year, few mortgage companies have filed cases against absconders, while developers have moved the Dubai Land Department, seeking repossession of property.